Citation Nr: 1114432 Decision Date: 04/13/11 Archive Date: 04/21/11 DOCKET NO. 09-10 671 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Boston, Massachusetts THE ISSUES 1. Whether a Department of Veterans Affairs disability compensation overpayment regarding additional dependency payment was properly created. 2. Entitlement to a waiver of recovery of an overpayment of additional compensation for a dependent. REPRESENTATION Appellant represented by: Disabled American Veterans ATTORNEY FOR THE BOARD A. P. Simpson, Counsel INTRODUCTION The Veteran served on active duty from July 1950 to June 1953. This case comes before the Board of Veterans' Appeals (Board) on appeal from a May 2008 decision of the Newark, New Jersey, Department of Veterans Affairs (VA) Regional Office (RO). The Veteran relocated to Massachusetts and jurisdiction of his claim was assumed by the RO in Boston, Massachusetts. Please note this appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2010). 38 U.S.C.A. § 7107(a)(2) (West 2002). The issue of entitlement to waiver of recovery of an overpayment of compensation benefits based on a dependent is REMANDED to the RO via the Appeals Management Center (AMC), in Washington, DC. FINDINGS OF FACT 1. The Veteran's spouse died in September 2007. 2. From October 1, 2007, through May 2008, the Veteran received additional VA compensation benefits for his spouse. 3. In September 2007, the Veteran informed an employee at a VA medical facility that this wife had died earlier that month. 4. Even though the Veteran had notified a VA employee of his wife's death, he remained at fault in continuing to accept the VA benefits at the same amount, despite being aware that his benefits would have been adjusted due to the change in dependency status. CONCLUSION OF LAW An overpayment of disability compensation regarding additional dependency payment was properly created. 38 U.S.C.A. §§ 1115, 5112, 5302 (West 2002 & Supp. 2010); 38 C.F.R. §§ 1.911, 1.962, 3.401, 3.501 (2010). REASONS AND BASES FOR FINDINGS AND CONCLUSION I. Veterans Claims Assistance Act (VCAA) In this case, the Veteran's claim involves the validity of a creation of an overpayment, involving Chapter 53 of Title 38 of the Unites States Code. Therefore, the duty to notify and assist provisions of the VCAA do not apply. Lueras v. Principi, 18 Vet. App. 435 (2004); Barger v. Principi, 16 Vet. App. 132, 138 (2002); see also 38 U.S.C.A. §§ 5103, 5103A (West 2002 & Supp. 2010). Notwithstanding the fact that the VCAA is not controlling in this matter, the Board has reviewed the case for purposes of ascertaining that the Veteran has had a fair opportunity to present argument and evidence in support of his challenge to the validity of the overpayment. The Board concludes that the requirements for the fair development of the appeal have been met in this case. VA informed the Veteran in a May 2008 letter that it had reduced his award, effective October 1, 2007, due to the loss of a dependent spouse. It explained that if the change in the award decreased the payments for the prior period, it may establish an overpayment. Following the Veteran's notice of disagreement as to the overpayment, the RO sent the Veteran a statement of the case, which explained the basis for its determination. The Veteran was provided the opportunity to meaningfully participate in the adjudication of his claim, and he did in fact participate. Washington v. Nicholson, 21 Vet. App. 191 (2007). Hence, there is no error or issue that precludes the Board from addressing the merits of this appeal. II. Analysis The Veteran contends that he timely notified VA that his wife had passed away by contacting a VA medical facility, and because she was a recipient of benefits under CHAMPVA. Essentially, he maintains that the overpayment was not his fault, and is therefore not valid. An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. See 38 U.S.C.A. § 5302; 38 C.F.R. § 1.962. An overpayment may arise from virtually any benefits program administered pursuant to VA law, including pension, compensation, dependency and indemnity compensation, education educational assistance benefits and subsistence allowance, insurance benefits, burial and plot allowances, clothing allowance, and automobile or other conveyance and adaptive equipment allowances. See 38 C.F.R. § 1.956(a) (2010). The provisions of 38 U.S.C.A. § 1115 provide for additional compensation for dependents. The effective date of a reduction of compensation by reason of the death of a dependent of a payee, shall be the last day of the month in which such death occurs. 38 U.S.C.A. § 5112(b)(2); 38 C.F.R. § 3.501(d)(2). As an initial matter, the Veteran does not assert that the amount of the debt is incorrect; rather, he disagrees that he should be responsible for any debt given the fact that he notified VA of his wife's death. There is no dispute that the Veteran's wife died in September 2007, at which time the appellant became single with no dependents. It is likewise undisputed that, even though his wife had died, he continued to receive additional compensation for his wife beginning in October 2007. The law, as noted above, clearly indicates that, upon a death, the Veteran's compensation will be reduced effective the last day of the month in which such death occurred. 38 C.F.R. § 3.501(d)(2) (2010). Thus, the Veteran should not have continued to receive additional compensation benefits for a dependent after September 30, 2007, the last day of the month his wife had died. See 38 U.S.C.A. § 5112(b)(2); 38 C.F.R. § 3.501. In order for the Board to determine that the overpayment was not properly created, it must be established that the Veteran was legally entitled to the benefits in question or, if there was no legal entitlement, then it must be shown that VA was solely responsible for the Veteran being erroneously paid benefits. Sole administrative error connotes that the Veteran neither had knowledge of nor should have been aware of the erroneous award. Further, neither the Veteran's actions nor his failure to act must have contributed to payment pursuant to the erroneous award. 38 U.S.C.A. § 5112(b) (9),(10); 38 C.F.R. § 3.500(b)(2); Jordan v. Brown, 10 Vet. App. 171 (1997). The United States Court of Appeals for Veterans Claims (Court) has noted that, "[s]tated another way, when an overpayment has been made by reason of an erroneous award based solely on administrative error, the reduction of that award cannot be made retroactive to form an overpayment debt owed to VA from the recipient of the erroneous award." Erickson v. West, 13 Vet. App. 495, 499 (2000). In this case, following the award of VA pension benefits in 1993, the Veteran was informed that included in his payment were benefits for his spouse in a September 1993 letter. The RO stated, "[Y]ou must notify us immediately if there is any change in the number or status of your dependents. Failure to promptly notify the VA of a dependency change will result in the creation of an overpayment in your account." In November 1994, the RO sent the Veteran a letter stating, "This letter is to remind you to tell us immediately if there is any change in your income. . . . If there are no changes in your income or dependency status, you do not have to do anything." In December 1994, VA informed the Veteran that it was terminating pension benefits because the Veteran's family income had changed. The Veteran was informed in a separate letter that this created an indebtedness of $3,930.00. The Veteran submitted a timely waiver, and in February 1995 the Committee on Waivers and Compromises waived the overpayment. In June 2002, following the award of compensation benefits, VA informed the Veteran it was paying him as a veteran with one dependent and to, "Let us know right away if there is any change in your marital status." (Italics in original.) In an April 1, 2008, letter, VA wrote to the Veteran and reminded him that the compensation he received included an additional amount for his spouse and/or child(ren) and that he was responsible for reporting any changes in the number of his dependents. VA asked the Veteran to verify the number of dependents. At that time, the Veteran submitted a copy of his wife's death certificate. He stated he had informed a VA medical facility of his wife's death and thought that such was sufficient. He added, "My monthly income was not reduced at that time-her share was not deducted after we notified the VA." In a June 2008 statement, the Veteran stated he had informed VA of his wife's death and waited for VA to reduce his payments. He stated he figured VA knew what it was doing by continuing to pay him at the same rate. After having carefully reviewed the evidence of record, the Board finds that the preponderance of the evidence supports finding that the creation of the overpayment was proper. In other words, the creation of the overpayment was valid. The reasons follow. The record shows that the Veteran informed a VA employee in September 2007 that his wife had died earlier that month. Thus, he did inform someone at VA of his wife's death, which means that VA is partially at fault in continuing to pay the appellant for having a dependent spouse. However, a finding of administrative error requires not only error on the part of VA, but that the beneficiary be unaware that the payments are erroneous. The Board cannot make that determination in this case. The Veteran had been informed as early as 1993 that the failure to promptly notify VA of a dependency change "will result in the creation of an overpayment in your account." He was reminded in the June 2002 award letter that he was receiving additional compensation for a dependent and that he needed to report any change in his dependency status. Thus, he had actual knowledge of the fact that his monthly benefit was higher because he had a dependent spouse. The Veteran has admitted he was aware that his payments had not been reduced following his notifying VA of his wife's death. While he has claimed he suspected VA knew what it was doing, he had doubts about the payments he was receiving. He should have contacted VA to ask why his monthly payments had not changed. The Veteran's suspicion of the possible erroneous payment relieves VA of sole administrative error. In other words, he is partially at fault in continuing to retain the VA benefits at the same amount, despite being aware that his benefits would have been adjusted due to the change in dependency status. The Veteran continued to receive additional monthly compensation payments for a dependent spouse after his spouse's death to which he was not entitled. The Board concludes the overpayment in question is a valid debt. ORDER The overpayment of VA compensation benefits regarding additional dependency payment was properly created. REMAND In his June 2008 statement the appellant reported that he needed considerable help in returning the overpayment, and that he was still paying bills related to his wife's death. In the opinion of the Board this is a valid claim of entitlement to waiver of recovery of the overpayment of compensation benefits. Hence, given the fact that the overpayment was properly created, the appellant's claim of entitlement to waiver of recovery must now be adjudicated by the RO's committee on waivers and compromises. Accordingly, this case is REMANDED for the following: After completing all appropriate development, to include offering the appellant an opportunity to complete a financial status report, the Veteran's claim for waiver must be reviewed by the RO's committee on waivers and compromises. If the appeal remains denied, either in whole or in part, the RO must issue a supplemental statement of the case and afford the Veteran and his representative an opportunity to respond. The appellant has the right to submit additional evidence and argument on the matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999). ________________________________________ DEREK R. BROWN Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs